First Republic Bank closed by US regulators, JPMorgan to acquire assets

ISTANBUL

The troubled First Republic Bank was closed by US regulators, while its assets are to be acquired by JPMorgan Chase, the Federal Deposit Insurance Corporation (FDIC) said Monday in a statement.

The US-based commercial and wealth management institution was closed Monday by the California Department of Financial Protection and Innovation, which appointed the FDIC as a receiver.

To protect depositors, the FDIC is entering into a purchase and assumption agreement with JPMorgan Chase Bank to assume all of the deposits and substantially all of the assets of First Republic Bank, it said.

First Republic Bank saw shares dive almost 50% last Wednesday with sudden withdrawals amid weak first-quarter results surrounding the US banking crisis.

The bank's total deposits stood at $104.5 billion in the first three months ending March 31, which was down from $176.4 billion recorded in the final three months of 2022.

It had approximately $229.1 billion in total assets and $103.9 billion in total deposits as of April 13.

President Joe Biden later said that the federal regulators' actions are keeping the US banking system "safe and sound."

"Let me be very clear, all depositors are being protected. Shareholders are losing their investments. And critically, taxpayers are not the ones that are on the hook," he told during his speech at the National Small Business Week event held at the White House.

He added that the regulators' actions also protect small businesses across the nation, which are required to continue ensuring payroll for their employees.